The prospect that the promise of near-zero U.S. interest rates for two years will spur economic growth helped support crop futures on Wednesday.
Canola futures for 2011-12 edged slightly lower but futures for the 2012-13 crop rose.
November 2011 canola closed at $540.70, down 60 cents, but November 2012 rose $6.20 to $540.20.
Soybeans and corn were little changed.
Nearby canola was undermined by regular commercial hedging to cover farmer selling, the beginning of swathing and by good weather on the Prairies.
Wheat posted the best gains on thoughts that USDA will reduce its spring wheat production estimate in its monthly report Thursday. Also, worries are growing that the lingering drought in the U.S. southern plains will reduce winter wheat seeding.
Analysts expect the USDA will reduce its outlook for all the major crops in tomorrow’s report.
But good weather forecasts for the Midwest limited the upside. Soybeans are starting to set pods and favourable weather will support yields.
Also, France’s agriculture department released soft wheat and rapeseed estimates that showed the hot, dry period earlier in the season did less damage than expected.
The U.S. Federal Reserve’s announcement on Tuesday that it intended to keep interest rates low for two years gave support to commodities but U.S. stock markets lost all of Tuesday’s gains because of worries about French banks.
France has the highest debt-to-GDP ratio of the handful of triple-A countries in the euro zone and investors worried it might be next country to suffer a downgrade in its credit rating.
Gold touched a new record high of $1,800 an ounce. In 2007 gold was trading at less than $700.
Winnipeg (per tonne)
Canola Nov 11 $540.70, down $0.60
Canola Jan 12 $548.90, down $0.60
Canola Mar 12 $554.30, down $0.10
Canola May 12 $558.40, up $0.30
The previous day’s best basis was $15 under the November contract according to ICE Futures Canada in Winnipeg.
The July contract’s 14-day Relative Strength Index was 33. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley Oct 11 $205, unchanged
Chicago (per bushel)
Soybeans Aug 11 $13.0075, up 2.0 cents
Soybeans Sep 11 $12.955, up 2.25
Soybeans Nov 11 $13.015, up 1.75
Corn Sep 11 $6.78, down 0.25
Corn Dec 11 $6.885 unchanged
Oats Sep 11 $3.4025, up 6.25
Oats Dec 11 $3.51, up 6.0
Minneapolis (per bushel)
Spring Wheat Sep 11 $8.3725, up 20.5
Spring Wheat Dec 11 $8.425, up 21.25
Spring Wheat Mar 12 $8.4875, up 18.0
Light crude oil nearby futures in New York rose $3.59 to $82.89 US per barrel.
The Canadian dollar at noon was $1.0091 US, down from $1.0108 the previous trading day. The U.S. dollar at noon was 99.10 cents Cdn.
The stronger commodities helped the Toronto Stock Exchange composite index close up 88.61 points, or 0.73 percent, at 12,197.87.
The Dow Jones industrial average ended down 519.83 points, or 4.62 percent, at 10,719.94. The Standard & Poor’s 500 Index lost 51.77 points, or 4.42 percent, at 1,120.76. The Nasdaq Composite Index fell 101.47 points, or 4.09 percent, at 2,381.05.
